Kansas City Lodging Market Analysis
Kansas City Lodging Market Analysis
The Impacts of Inventory Additions within the Kansas City Marketplace
December 18, 2018
Objectives & Agenda
Section 1 ? IMPACT OF SUPPLY GROWTH
Section 2 ? COMPARABLE & COMPETITIVE MARKETS
Determine Impact of Inventory Additions
Compare & Contrast the Marketplace
Section 3 ? MARKET ASSUMPTIONS & MODELING
Project Sales & Funding
Implications
? 2018 Jones Lang LaSalle IP, Inc. All rights reserved.
Process
Research and Outreach
? Analyzed STR reports ? Tracked added inventory ? Surveyed Market Mix
Analysis and Projections
Comparison and
Assessments
? Reviewed sales reports & impacts
? Prepared outlook & projections
? Developed future sales goals ? Established associated
budget scenarios based on collections from Convention and Tourism Tax District
? Compared results to other like destinations and national trends
? Reviewed health of Kansas City economy
? Present findings and opportunities
? 2018 Jones Lang LaSalle IP, Inc. All rights reserved.
Section 1:
Historic Impact of Kansas City Supply Growth
Lodging Supply & Performance
Kansas City Convention & Tourism District Lodging Performance
72% Occupancy for "healthy"
lodging market
$140
70%
$120
60%
$100
50%
$80
40%
$60
30%
$40
20%
$20
10%
$0 2007
ADR RevPAR Occupancy New Rooms
$96.09 $57.85 60.2%
152
2008
$98.27 $58.87 59.9%
72
2009
$90.93 $50.82 55.9%
0
2010
$91.69 $53.49 58.3%
343
2011
$93.13 $54.24 58.2%
0
ADR
2012
$97.00 $57.59 59.4%
232
2013
$97.98 $58.62 59.8%
132
RevPAR
2014
2015
2016
2017
0%
2018 YTD
Annual Avg
$101.34 $106.19 $108.87 $113.38 $116.64 $100.96
$64.96 $70.28 $69.96 $76.23 $77.36 $62.52
64.1%
66.2%
64.3%
67.2%
66.3%
61.7%
0
0
227
232
357
Occupancy
New Rooms
Source: Smith Travel Research, JLL
? 2018 Jones Lang LaSalle IP, Inc. All rights reserved.
Future Room Inventory
Convention & Tourism Tax District
Year 2017
Number of Hotels
83
Cumulative Potential & Added Inventory
13,121
Added Rooms (construction)
N/A
Announced Potential Rooms -
2018
91
13,946
825
-
2019
96
14,895
514
435 (4 properties)
2020
98
16,169
1,121
153 (1 property)
2021
98+
16,411
-
242 (1 property)
2022
98+
16,931
-
520 (3 properties)
Source: Visit KC, STR, JLL
? 2018 Jones Lang LaSalle IP, Inc. All rights reserved.
Impact of New Inventory on Occupancy
Convention & Tourism Tax District Occupancy with Added Supply
72% Occupancy
for "healthy"
80%
lodging market
Stabilization line for 67% occupancy rate*
70%
60%
50%
40%
The path of doing nothing
Stability requires production of 483,938 new room nights in 2020
Projected decrease in occupancy rate with no
change in demand
20,000 18,000 16,000 14,000 12,000 10,000
Occupancy Rate Total Number of Rooms
8,000 30%
6,000 20%
4,000
10% 2,000
0%
0
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023
Full service
Select service
Occupancy at 67.2%
Occupancy
Projected Occupancy - No New Demand
* "Stabilization occupancy" derived from taking the average occupancy for 2016, 2017, and 2018, with 2018 occupancy projected to be 66.5%.
Source: STR, JLL
? 2018 Jones Lang LaSalle IP, Inc. All rights reserved.
7
Impact on ADR & RevPAR
Average Daily Rate & RevPAR Total Number of Rooms
Convention & Tourism Tax District Performance with Added Supply
$140
2.8% actual CAGR in ADR
from 2009 through 2017
$120
Temptation point for lowering ADR
$100
1.15% projected CAGR in ADR from 2017 through 2023
$80
$60
20,000 18,000 16,000 14,000 12,000 10,000 8,000
$40
6,000
Projected RevPAR drops by
9.2% between 2017 and 2020
4,000
$20
2,000
$0
0
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023
full service
select service
RReevvPPaArR
ADR
Source: STR, JLL
? 2018 Jones Lang LaSalle IP, Inc. All rights reserved.
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